Metro Bank RBS SME application cost £590k in Q1 2018 as the bank pursued the RBS alternative remedies package application, it said in its results.

The challenger bank hit £10m profit before tax in Q1 2018, up 21% from £8.3m in Q4 2017, and said its bid for the RBS alternative remedies package worth £425m was progressing.

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The funds are designed to boost competition in UK business banking, with Nationwide announcing their intention in March to compete for a share of the money, along with other challengers including Virgin Money and Aldermore.

Results

As of 31 March total deposits were £12,702m, up from £11,669m on 31 December 2017 and £9,010m at 31 March 2017, a 9% quarterly and 41% year-on-year growth.

Deposits from business and commercial customers represent 53% of 31 March 2018 total deposits (31 December 2017: 53%).

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Total net loans as of 31 March were £10,974m, up from £9,620m on 31 December 2017 and £6,482m at 31 March 2017; an increase of 14% in the quarter and 69% year-on-year.

Loans to commercial customers represented 32% of total lending as of 31 March 2018 (31 December 2017: 33%).

Non-performing loans were 0.22% of the portfolio (31 December 2017: 0.27%). Cost of risk remained low at 0.09% at 31 March 2018 (31 December 2017: 0.14%).

Craig Donaldson, chief executive officer at Metro Bank said: “Momentum in our growth continues. In the first quarter, we’ve seen a 69% growth in lending and 41% growth in deposits year-on-year and welcomed tens of thousands of new customer accounts.

“Our commitment to deliver superior service to SMEs is stronger than ever. For too long, the big five banks have had an unhealthy stranglehold on the SME banking sector and businesses have been crying out for an alternative. In London and the South East – which accounts for 34% of the UK’s SME market – we are seeing thousands of businesses switch to us, proving that when there is a credible alternative to the incumbents, businesses vote with their feet.”